Senate approves extension to qualify for homebuyer tax credit

The proposal pushes the closing deadline back to Sept. 30, 2010, from the previous June 30 deadline.
By a 60-37 vote, the Senate on Wednesday approved a measure extending the closing deadline for qualifying for the homebuyer tax credit. The proposal is expected to be added to a slimmed-down tax extenders bill that Senate Democratic leaders are expected to unveil Wednesday.

To qualify for the credit, homebuyers have until June 30 to close on the purchase. The proposal pushes the closing deadline back to Sept. 30, 2010.

  Senate Majority Leader Harry Reid (D-Nev.), Senate Banking Chairman Chris Dodd (D-Conn.) and Sen. Johnny Isakson (R-Ga.) authored the proposal. The senator from Georgia tried but failed to offset the amendment's cost with unspent stimulus dollars. His proposal failed by a 45-52 vote. The proposal that is expected to be added to the extender bill is offset by denying the tax deduction for certain punitive damages, which raises $315 million over 10 years. The cost for extending the closing date is $140 million, which means the provision reduces the deficit by $175 million over 10 years.

Congress originally passed an $8,000 tax credit for first-time homebuyers as part of the stimulus bill President Barack Obama signed into law in February of 2009 (In fact, the original tax credit was in 2007 for $7,500, but had to be paid back). Lawmakers extended and expanded the measure last November to include a $6,500 tax credit for buyers who have already owned a home. Both of these measures expired at the end of April for buyers that enter into a contract to purchase a home. Wednesday's measure only extends the cut off date for closing on the property.

If You Missed Out on the Tax Credit - Don't Complain!

To all of you who are complaining that you don't qualify because you haven't place a home under contract yet or went under contract after April 30, 2010:

You have had over 2 years to take advantage of the tax credit. The 1st deadline was in 2008, then 2009 and finally April 30, 2010. We all knew that it wouldn't be extended forever. There were many, many great bargains on homes out there, and we had dozens and dozens of clients buy them and take advantage of the credit. We had many other buyers who didn't take advantage of it because they procrastinated too long.

But as the final April 30th deadline approached, I told my buyers that it made no sense to buy a property they weren't happy with just for the sake of getting the tax credit. By waiting they have the opportunity to purchase the home they really want and, with all the short sale/bank owned properties on the market, save much more than the $8,000 they would have received.

Yes, the tax credit is over, but the savings are still here. Buyers are picking up short sale properties and with a little work they are getting instant equity.

Jim Armstrong

Real Estate Economic Report for 1st Quarter 2010

The Economic and Market Watch Report was just released by MLS Property Information Network - the largest real estate multiple listing service in Massachusetts.

For Essex County, it is still a buyer's market, but it is moving towards the neutral zone. The average sale price is steady, with the number of homes on the market predicted to rise giving buyers more to choose from. The average number of days that a home is on the market before going under contract has risen to 119, and is expected to rise more from there as more seller place their homes up for sale.

Though the tax credit incentives are over, there is still strong activity as buyer take advantage of prices that have bottomed out, and the excellent mortgage rates. For people who are thinking about moving up to a larger, higher priced home there are significant price reductions happening every day.

Here is a link to the complete report:

http://www.mlspin.com/mlspin/downloads/economic_market_watch_reports_current/MLSPINQ12010.pdf

Jim Armstrong
President/Broker
Armstrong Field Real Estate
978-394-6736

Zillow Reports that Boston Area Home Values Up

Zillow.com Reports that Boston Area Home Values are Up

The Boston metro area is one of the few places in the United States that have year over year home home value increases for the 1st quarter of 2010. Some other areas that had increases are Santa Barbara, Santa Cruz, Green Bay, San Diego, San Francisco, Tulsa, Dayton, Denver and New Orleans. Of the 135 areas tracked by Zillow, only 29 had increases in home values.

See the full stats at: http://www.zillow.com/local-info/

Jim Armstrong

Too Late for the Tax Credit!

Too Late for the Tax Credit!

The April 30th deadline for placing a property under agreement in order to qualify for the Fed's $8,000 tax credit has come and gone. If you did not have an offer accepted in time, does that mean you should stop looking for your first home?

Of course not! There are so many good deals out there right now there it makes no sense to discontinue your home search. Just in Essex County there are 400 single family homes priced under $250,000. Three years ago you would be hard pressed to find 25 homes in that price range. If you are looking for a condo there are 285 priced under $150,000 in Essex County.

Don't overlook short sale properties now that you don't have the tax rebate deadline looming over you anymore. You can get some fantastic deals on all types of properties. Don't let the asking price stop you from placing an offer significantly lower. When making an offer, you do have to consider what the property is really worth in today's market, and how long it has been on the market. A newly listed short sale property with aggressive (low) pricing could get offers for more than the list price. Your buyer agent is the best person to help you determine an offer price.

You do have to be a little patient when waiting for a response to your offer, but in the end it could be worth it. The good news is that many lenders are working on cutting the response time down for replying to short sale offers.

Jim Armstrong

Jobless Rate Falls. First Time since 2007

Jobless Rate Falls. First Time since 2007

The state unemployment rate fell last month for the first time in nearly three years as Massachusetts employers added thousands of jobs, the clearest sign yet that the economic recovery is gaining strength, the state reported yesterday.

The job gains were broad based, spreading across sectors from retail to technology to financial services, and apparently strong enough to bring down the unemployment rate even as thousands more residents entered the labor market in search of work.

“It is hard to see anything bad in this,’’ Alan Clayton-Matthews, an economics professor at Northeastern University, said of the report.

See the rest of the article at Boston.com

Posted using ShareThis

Pending Homes Sales up 9th Month in a Row.

WALTHAM, MA. – April 6, 2010 – The Massachusetts Association of REALTORS® (MAR) reported the number of single-family homes placed under agreement in March 2010 was up 27 percent over March 2009, and condominiums were up 38 percent. March is the ninth straight month that the number of both single-family homes and condominiums placed under agreement had increased over the year before.

“It appears that the record rains in March didn’t keep buyers from taking advantage of the market conditions and making offers on homes,” said 2010 MAR President Kevin Sears, broker/co-owner of Sears Real Estate in Springfield. “Whether the rain will impact how many of these deals close is still a question, but the buyers are out there and that is a good sign for the market.”

There were 4,808 single family homes put under contract in March 2010, compared to 3,783 in March 2009. On a month-to-month basis (which really doesn't mean squat because of seasonal & monthly fluctuations), single-family homes put under agreement were up 37.8 percent from 3,489 homes in February.

The number of condos put under agreement in March was 2,1222 compared to March 2009 with 1,543 units.

Jim Armstrong

Boston in the Top Ten Cities for Borrowers

Top 10 Best Cities for Borrowers
Some cities are better than others for borrowers.

The best cities have the lowest percentage of foreclosures and delinquencies, including a low percentage of bank-owned homes. In most of the cities on this best list, home prices are actually rising. Boston ranks 6th in the list of the top ten.

This kind of solid housing market motivates banks to offer lower rates and better terms.

Here are the 10 cities that Forbes ranks as the best for borrowers:
1. Kansas City, Mo.
2. Houston
3. Dallas
4. Virginia Beach, Va.
5. San Antonio, Texas
6. Boston
7. Pittsburgh
8. Denver
9. Seattle
10. Portland, Ore.

Time to Spring Ahead...and Check Those Smoke Detectors!

Tonight is the night (actually, tomorrow morning at 2am) that we turn our clocks ahead by one hour, and when we should be replacing the batteries in our smoke detectors (and carbon monoxide). This year, with the change in the smoke detector regulations, you should consider replacing any of your smoke detectors that are near (within 20ft) a kitchen or a bathroom with a shower with a photoelectric model.

Most smoke detectors that are currently installed in homes are of the ionization type. They work very well, but are prone to going off due to cooking vapors and steam from a shower. When this happens, people tend to remove the batteries to shut them off, and ultimately forget to put them back in leaving everyone in the home vulnerable to a fire. The photoelectric type is not as sensitive to false alarms, therefore the batteries won't be taken out, leaving them ready to do their job at all times.

Though the new law that goes into effect in April only applies to new construction and homes that are being sold, you should take the initiative and install the photoelectric detectors now.

Jim Armstrong

New Massachusetts Smoke Detector Requirements

New State Smoke Detector Requirements

3/8/2010

A new regulation regarding the installation and maintenance of smoke detectors goes into effect April 5, 2010. These new regulations were enacted by the Massachusetts Department of Fire Services and will apply to single and multi-family homes built or most recently substantially altered prior to Jan. 1, 1975 and sold on or after April 5, 2010. Homes built or substantially altered on or after Jan. 1, 1975 are governed by the State Building Code, which already imposes the same requirements & restrictions.

See the rest of the article Here: Massachusetts REALTOR News

Will Congress Extend the Home Buyer Tax Credit?

It’s that time of year again: time for lobbyists to convince Congress to extend the home buyer tax credit.

The National Association of Realtors and other industry groups are beginning to make the rounds on Capitol Hill to press their case, which goes something like this: We know you’ve extended the tax credit two times already, but the housing market is still fragile, the tax credit is working, and don’t forget– you’re up for re-election soon. In other words, do you really want to own the next leg down in home prices?

See the rest of the article at the Wall Street Journal online:

http://blogs.wsj.com/developments/2010/02/22/take-three-will-congress-extend-the-home-buyer-tax-credit/

For Sale, But Not For Long

Karen Daly headed out Sunday to tour a renovated Natick house, confident she would be one of the few home hunters on a cold afternoon during which people were prepping for Super Bowl parties.

But when Daly arrived at the three-bedroom, $449,000 Cape, she found herself among a half-dozen other disappointed prospective buyers who learned that the seller had already accepted an offer. It wasn’t Daly’s first real estate letdown. Last month, she bid more than $20,000 above the asking price for a house in Framingham -- and lost out.

“If you are a buyer, you have to be very decisive, you can’t hesitate,’’ said Daly, 55, who sold her house in two days last summer and has been renting in Newton. “You are looking at very low inventory and very steep competition.’’

See the entire article at Boston.com: http://www.boston.com/business/articles/2010/02/13/for_sale_but_not_for_long/

Homeownership: Still the American Dream

There seems to be a long held American belief currently under attack. For over two hundred years, homeownership in this country was a desire of almost every American family. Recently however, more and more people have been pontificating on the fact that owning your own home should never have been held in such high regard.

I don’t want to overstate my concern as I know that the majority of Americans still hold homeownership sacred. Trulia just did a survey showing seventy seven percent of those questioned still believe that owning a home is a part of the American dream. Yet, it does concern me that, while people are being forced from their home due to economic difficulties, some are claiming that homeownership never should have been the goal anyway.

See the whole article here: Homeownership: Still the American Dream

Massachusetts Home Prices Increase in December 2009

The sale prices of single family homes and condominiums in Massachusetts increase by double digit percentages in December 2009 over the same period in 2008. With help from the home buyer tax credit incentive, the average sale price increased 10.9 percent. This was the first double digit increase in home prices in over 4 years.

The number of units sold in December was also up over the previous year. There were 3007 single family homes sold in Massachusetts, a 14.6% increase over 2008. Condominiums had even higher numbers, with a 31.7% increase in units sold year over year.

Inventory levels have gone done for the 21st month in a row. A year ago we had 9.6 months supply of single family homes and 11.3 months supply of condos. Last month we had 7.2 months supply of singles families and only 5.6 months supply of condos.

Monthly numbers don't mean as much as yearly figures do because of short term fluctuations in the market. But the yearly figures look pretty good also. Sales of single family homes for 2009 were up by 4.1% over 2008. Although the median sale price was down 6.8%, much of the drop in price came from the beginning of the year. The number of homes on the market was down almost 16% over 2008.

Jim Armstrong

http://www.marealtor.com/content/NewsTicker.htm?view=38&news_id=1254&news=31

FHA Mortgage Insurance Premium to be Raised

The FHA will soon raise the UFMIP (Up Front Mortgage Insurance Premium) that they charge on all mortgages.

On any new FHA mortgages after April 5^th, the UFMIP will now be 2.25% of the loan amount, as opposed to the current 1.75%.

Currently a $300,000 purchase with standard 3.5% down payment would have a $289,500 Base loan amount. The mortgage insurance would be $5,066 (1.75% UFMIP). So that makes the Total loan amount $294,566. At 5.00% that would be $1,581 for Principal and Interest.

Same purchase price after April 5^th.

$300,000 purchase with 3.5% down payment would have the same base loan amount of $289,500. The mortgage insurance would go up to $6,513 (2.25% UFMIP). The Total Loan Amount is $296,013. At 5.00% that would be $1,589 for Principal and Interest.

As you can see this change will affect the overall balance of the mortgage, however it should not have a large impact on the monthly payment.

Here is how the change will work time-wise if a homebuyer wants to avoid the increase:

Homebuyers will need to have an FHA CASE number prior to 4/5/10. They will not have to close before that date. So for example, your client puts a property under agreement 3/25/10. They contact their mortgage person to immediately to start the application process and obtain an FHA case number. The buyer will be grandfathered in under the old calculation as long as they obtained their FHA case number prior to 4/5/10. The FHA Case Number is tied to the property as well as the client – so clients who have not identified or put a property under agreement by 4/5 will be subject to the new calculation.

Do I need a REALTOR? A Question From a Home Buyer.

Question: I'm paying cash for a home, so I don't need a REALTOR, right?
- Rachel from Texas

Answer: Paying cash would be even more of an incentive to use a REALTOR. You will not have any other professionals, other than the closing attorney, to help protect your interests and investment. Our job isn't just to show a person properties, but to help out in all aspects of a home purchase. The last thing you want to do when buying a home is to deal directly with the listing agent. That agent represent the seller of the home, and is trying to get the best deal for his/her client. That means he/she is going to try to get as much of that cash from you as possible. A REALTOR Buyer Agent, on the other hand is there to protect you and help you pay the least amount for a home. Your REALTOR also provides a host of other services, also. Best of all, there is no cost to you for the service!

For more information on the advantages of using a REALTOR, please go to:
http://armstrongfield.com/buyers_files/whyrealtorbuying.html

Jim Armstrong

Mortgage Rates Still on the Rise Ahead of Treasury Auctions

Mortgage Rates Still on the Rise Ahead of Treasury Auctions

Mortgage rates took a beating last week. Even the most aggressive lenders are now creeping towards 5.00% (for WELL-QUALIFIED borrowers). See more...

Check Those Smoke Detectors: New Massachusetts Smoke Detector Regulations Go Into Effect Jan. 1

Check Those Smoke Detectors: New Massachusetts Smoke Detector Regulations Go Into Effect Jan. 1

Armstrong Field Real Estate is Moving!

Received notice from Salem Five Bank (the landlord for my office) that they will not be renewing my lease at the end of February because they want to expand their call center. I said "Why don't you use the vacant space that is in your upper floors?" Evidently that is not in their master plan. I should have known when they didn't renew the lease for the other business that was next to me. Why would Salem Five use valuable ground floor space for a call center that does not have walk-in traffic? (doors are always locked). It is against everything that Salem is trying to do with their downtown - First floor space should be for retail or businesses that create foot traffic (ie: my business).

The good news is that I have found what is even better space then we have now. I'm currently negotiating the details of a lease. It has huge south facing windows, more space than what we currently have, plenty of storage, better parking, better visibility, restored antique hardwood floors and more.

The bad news is (besides the fact that I really hate moving) that it will cost a lot of money to build out and set up the space with a phone system, computers, desks, etc. Not to mention changing the address on everything. But with 4 new agents signing on this month (currently 18 agents) and more in the pipeline, it will be good to have the extra space. Plus I can build myself a office bigger than the 6'x7' space I am now using. Plus a game room (guitar hero competitions every Friday!), kitchen area, library, conference room and more.

Watch here for updates and our grand opening.

Jim Armstrong

Real Estate Outlook: Housing Warmer Than Weather

Real Estate Outlook: Housing Warmer Than Weather

If new applications to buy homes are any gauge, the U.S. housing market is warming up, and that's despite the fact that we're now into the traditionally quiet holiday season.

Applications for home purchase loans soared 42 percent last week on a non-seasonally-adjusted basis compared with the week before, according to the Mortgage Bankers Association.

That burst of activity may have been influenced in part by the long Thanksgiving week layoff. Or it could have been an early reaction to the extension of the $8,000 tax credit or the start-up of the new $6,500 credit.

Either way, it was an exceptional week for mortgage lenders.

But here's another possibility: With the economy gaining a little momentum, interest rates have begun edging up again.

Mortgage rates are still close to historic lows, 4.9 percent on average for 30-year fixed and 4.3 percent for 15 year fixed, but MBA chief economist Jay Brinkmann says they're likely to exceed 5.2 percent by this coming March.

So, maybe the rush to nail down financing by home buyers is a smart move … compared with paying half a point higher rates by early spring.

On other economic fronts, we're looking at a mixed bag of reports this week, though mainly positive:

Freddie Mac's found home prices nationwide up by about one point on average during the third quarter. That's on top of a two percent gain for the second quarter. Clear Capital, a real estate data company, also found prices up marginally - by 1.4 percent - during the month of November, though a few local markets came in with double digit gains.

But not all surveys agree on that. The well-regarded “IAS 360” index came in with a contrarian result. It found that overall prices in the U.S. were down slightly on average -- by about half a percent.

Since there's not a huge variation among the three reports, we can probably safely conclude that -- at the very worst -- prices have stabilized in most markets -- and at the very best, they're up a little.

There were also positive indications on lower delinquencies and foreclosures across the country. Realty Trac says foreclosure filings in November dropped by 8 percent - the fourth consecutive month of declines.

And Trans Union, the big credit bureau, forecasts three percent fewer mortgage delinquencies next year - after three straight years of rising delinquency rates.

Meanwhile,another national study on price reductions on listed properties found that during November the number of price cuts dropped in 27 major markets, a welcome sign of more realistic asking prices.

From: Jim Armstrong's Real Estate Update - December 2009